Question
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable Following is the income statement for the previous year: Granite Lime
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable Following is the income statement for the previous year:
| Granite | Lime | Nina | Total | ||||||||||
| Sales | $ | 503,000 | $ | 271,500 | $ | 229,000 | $ | 1,003,500 | |||||
| Variable Costs | 191,000 | 124,200 | 100,700 | 415,900 | |||||||||
| Contribution Margin | 312,000 | 147,300 | 128,300 | 587,600 | |||||||||
| Fixed Costs (allocated) | 274,000 | 168,250 | 121,750 | 564,000 | |||||||||
| Profit Margin | $ | 38,000 | $ | (20,950 | ) | $ | 6,550 | $ | 23,600 | ||||
a. What would Rocks profit margin be if the Lime division were dropped? b. What would Rocks profit margin be if the Nina division were dropped?
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Auditing A Guide To Principles And Practice
Authors: J H Crowhurst
1st Edition
0304309052, 978-0304309054
